it should be with a qualification, by limiting his liability to the time of his giving back his scrip with the letter of release to the directors, and that the directors must be regarded as purchasers from that date at least, of all Mr. Apps's interest, profit or loss, incident to the shares so previously held by him. That the company was well dissolved on the 14th of May 1846, and that on the 5th of September 1846, when the sum of 2s. 6d. per share was paid as a final dividend, it was well understood between Mr. Apps and all other shareholders in a similar position to himself and the directors that the accounts as between him and the directors were settled, and that the directors took upon themselves all further liabilities, if any.

Mr. Bethell and Mr. Malins appeared for the company, but were not called upon to address the Court.

The VICE CHANCELLOR.-It appears to me, attending to the words of the act of parliament, I cannot but hold that Mr. Apps was in effect a member of the company. He was clearly associated with those who were carrying on the scheme as provisional directors. There is an express

distinction between this case and those which have been cited. It is plain there might be a release from Mr. Apps to the directors of the remaining sum not paid, without their undertaking to release him from further claims, and the directors at the time of paying the final dividend are said to have stated that they believed further liabilities would be incurred. I cannot see that there has been any agreement on the part of the directors to release the shareholders from contributing to such further claims. I think, therefore, that Mr. Apps must be considered as a contributory under the act, and the motion must be refused.

Upon a motion for an injunction, it was held that if, upon the evidence before the Court, it appeared that the powers of an act of parliament for making a railway were to be exercised contrary to the conditions for which they were granted, or contrary to the conditions on which the shareholders subscribed their capital, the Court had jurisdiction to interfere; that if the company declined or were unable distinctly to state that they were constructing a part with the view of completing the whole line, this Court would interfere; that this Court would interfere upon the application of a single shareholder; and that the directors had no right to apply the capital subscribed for the whole line to make a part only and an injunction was granted to restrain the company from applying the capital, or any part thereof, otherwise than for the purpose and with the view of making and completing the entire line pursuant to the powers vested or hereafter to be vested in them by parliament.

:

Upon overruling the demurrer in this case (1), the plaintiff applied to the Court for an injunction to restrain the defendants, the directors of the Direct London and Portsmouth Railway Company from making the proposed railway from Epsom to Leatherhead only, and also from applying any of the funds of the company to that purpose, and to restrain them from taking or purchasing, on behalf of the company, any lands for the purpose of making such proposed railway, and from entering, on behalf of the company, into any agreement for the purchase of such lands, and from taking any other steps or proceedings for effecting any such purchase or purchases, and that they might be restrained from entering into or signing, on behalf of the company, any contract or agreement with any contractor or other person or persons for causing the said proposed railway from Epsom to Leatherhead, or the works thereof, or any portion of such railway or works, to be constructed or executed or relating thereto; and that the company might be restrained from sanctioning any arrangements respecting the tolls mentioned in an advertisement of the 18th of May 1849. The affidavits

(1) Ante, 378.

in support of the motion were to the effect stated in the bill upon the arguments on the demurrer; and it was also stated that many noblemen and gentlemen on the line of the Direct London and Portsmouth Railway had opposed it, but had withdrawn their opposition upon being paid large sums of money, and that the landowners on the line had in many instances been paid large sums of money (one of which amounted to 7,000l.) not to enforce their contracts, as it was well known that the company were unable to make the line beyond Leatherhead.

In opposition to the motion, the affidavits of Mr. Parsons and Mr. Wilkinson stated that by the provisions of their act (9 & 10 Vict. c. lxxxiii. s. 45.) the Brighton, Chichester and South Coast Railway Company had power to arrange with them for making the line between Portsmouth and Havant, over which distance they were to run so as to be convenient to both. And as to the line between Gomshall and Dorking, which the act directed to be made by the company in three years, it was enacted by the Reading, Guildford and Reigate Railway Act (9 & 10 Vict. c. clxxi. s. 37) that if the Direct London and Portsmouth Railway Company should not have staked out that part of the line and entered into possession of the lands necessary for it in eighteen months, or should not proceed so as to have at least one line of rails over it completed in three years, then the Reading, Guildford and Reigate Railway Company were themselves empowered to construct it. It was also stated, by Mr. Parsons, that previous to passing the Direct London and Portsmouth Railway Act, contracts had been entered into by the promoters of the undertaking with the landowners between Epsom and Portsmouth for the purchase of land; and that in 1847 the directors proceeded to take measures for making the line from Epsom to Portsmouth, and that they served notices upon the landowners on the line of their intention to take their lands, and that they entered into contracts with others for the purchase of their lands at prices agreed upon, and that in several instances they paid divers sums of money for holding over such contracts until the lands should be required. That further powers

were necessary to enable them to make deviations and alterations in the line, in consequence of which they abstained from serving notices on parties who would be thereby affected. That an act, 10 & 11 Vict. c. xxiv., was obtained, sanctioning a deviation in the approach to Dorking (which was to be completed in two years), and other alterations, with compulsory powers for three years to take lands. That the act of the Reading, Guildford and Reigate Railway Company was obtained in 1846, and gave them power to construct that part of the line between Gomshall and Dorking, if the Direct London and Portsmouth Railway Company should not have the whole line between Epsom and Havant completed and ready for traffic within the appointed time; but with power for the Direct London and Portsmouth Railway Company to require a transfer of the line, after completion, on payment of the outlay then made. That in the early part of 1849 notices were served on the owners of lands between Epsom and Leatherhead, and in many instances the lands were actually purchased and paid for, and the company let into possession, and in a majority of cases contracts were entered into between the company and the owners, for the purchase of their lands at prices specified, and that in all cases, where the prices of such lands had not been agreed upon, the question was left to the arbitration of parties named in agreements which had been reduced to writing, and were either executed or ready to be executed. That large purchases had been made between Gomshall and Havant; and that the Railway Commissioners upon being applied to had refused to extend the time for making the line. That arrange

ments had now been made, by which the Brighton and Chichester Railway Company, incorporated by the 8 & 9 Vict. c. cxcix, were to make that part of the line between Havant and Portsmouth; and that the Direct London and Portsmouth Railway Company should have the use of it. That in June 1848 the Direct London and Portsmouth Railway Company gave notice to the Reading, Guildford and Reigate Railway Company, that they intended to abandon the line between Gomshall and Dorking, and that the latter company had

since made it. That it was still practicable to take lands for the whole line; that the distance between Gomshall and Dorking was four miles, and between Portsmouth and Havant was six miles. Mr. Wilkinson also stated, that neither the Direct London and Portsmouth Railway Company, nor the directors, had ever determined not to make the railway from Epsom to Portsmouth, but that it had been impossible to proceed further than stated in making the railway from the difficulties of the times and other financial considerations. That the construction of the railway to the extent proposed would be beneficial to the shareholders of the company, and was desired by the inhabitants of Leatherhead and the district adjoining; and that it was probable that the whole of the said Direct London and Portsmouth Railway, or some railway in the same line, would at some future period be made. Mr. Ponsford stated that the Direct London and Portsmouth Railway Company and the Reading, Guildford and Reigate Railway Company were rivals; that the plaintiff was the brother-in-law of Mr. Alderman Salomans, the chairman of the Reading, Guildford and Reigate Railway Company; and that this suit was instituted by the latter company to put an end to the operations of the Direct London and Portsmouth Railway Company.

Mr. Turner and Mr. Cole, in support of the motion, insisted that the affidavits were very indefinite, not only as to the intentions of the defendants, but also as to what they had done towards carrying out the undertaking. The bill distinctly alleged that all intention of making the railway from Epsom to Portsmouth was abandoned; but the affidavit was peculiar; it stated that neither the company nor the directors had ever determined not to make the railway from Epsom to Portsmouth; but if any doubt remained, it was removed by the following passage: "that the construction of the railway to the extent and in manner in which the same is now proposed to be constructed, will be beneficial to the interests of the shareholders, and is much desired by the inhabitants of Leatherhead, and the district adjoining." This was a distinct statement of what they proposed to do. An opinion was then stated that it

was very probable that the whole of the Direct London and Portsmouth, or some railway on the same line, would be made at some future period: this made a subscriber a shareholder in three broken bits of railway, one from Epsom to Leatherhead, of four miles, another from Dorking to Gomshall, of four miles, and another from Havant to Portsmouth, of six miles, so that, according to the notion of the defendants, they were not to be restrained from making the line from Epsom to Leatherhead, because the original contract being for a line from Epsom to Portsmouth, the plaintiff would, in addition to the line from Epsom to Leatherhead, become entitled to an interest in the other four miles of railway from Dorking to Gomshall, and in the other six miles of railway from Havant to Portsmouth, in which he would not acquire any right of property in the line, but simply a right to pass over the line according to arrangement with the Brighton, Chichester and Portsmouth Railway Company. It was also impossible to know what contracts they had entered into, or what they had done, either for the purchase of lands or for the making of the railway. It was then said, that the Reading, Guildford and Reigate Railway Company was a rival line, but that question was determined in Colman v. the Eastern Counties Railway Company (2), where Mr. Colman was a shareholder in the railway, and also a shareholder and agent of the General Steam Navigation Company, and was acting on their behalf, and yet the Court interfered at his instance. This case was far short of that. The plaintiff was of opinion that there was no intention to carry on the Direct London and Portsmouth Railway; and that it would be better for the Reading, Guildford and Reigate Railway Company that it should not be carried out in the imperfect shape in which it was proposed to be done; and, as there was nothing in the affidavits to prevent the interference of the Court, they trusted the case made was sufficient to entitle them to the injunction asked.

Mr. Malins and Mr. Bovill, for the defendants, contended that the directors had

(2) 10 Beav. 1; s. c. 16 Law J. Rep. (N.S.) Chanc. 73.

entered into contracts for purchase of the land between Epsom and Leatherhead, and they would be liable to bills in this court for specific performance. It was not to be supposed that the landowner would recede from his contract: what course, therefore, could the directors pursue? What relief could this Court afford under such circumstances? Landowners, in future, would refuse to sell except under contracts simultaneous throughout the proposed line; this Court would, therefore, render acts of parliament little better than waste paper: but, further than this, contracts, amounting to 19,7007., had been entered into with contractors for making the line. This company was constituted by act of parliament for making a railroad from London to Portsmouth, and the injunction. asked for sought to prevent the company from exercising any of the powers vested in them by the legislature; but this Court would not do any act which would destroy or break up a company, and it would not do any act in which it could not hold them indemnified with regard to acts they had legally done. If this injunction was granted, payment of money under legal contracts would be a breach of the injunction, but so long as incorporated companies were acting within the provisions of their acts of incorporation, this Court would not interfere with them-Lee v. Milner (3). It was the usual course to make these roads along the line from intermediate places, and the whole of the paid-up capital was not to be expended on this line. Was this company to be precluded from using its best exertions to keep its contract with the public because they did not say that they would make the whole line, or because present circumstances were unfavourable to them? But the company had still five years to make the line, and when there was sufficient time to complete the undertaking this Court would not interfereSalmon v. Randall (4), Wood v. the North Staffordshire Railway Company (5). If the injunction was granted, no compensation could be made for the damage, as the time for the exercise of the powers of the

(3) 2 You. & C. Ex. 611; s. c. 2 Mee. & W. 824; 6 Law J. Rep. (N.S.) Exch. 205.

(4) 3 Myl. & Cr. 439.

(5) 13 Jurist, 466.

act of parliament could never be restored; and this company stood in the same situation as if the time was not limited, until the expiration of the whole time allowed for making the railroad-Rigby v. the Great Western Railway Company (6). Power and authority was given to this company to deliberate why, then, was this Court to interfere at the instance of a shareholder? In all companies' acts a discretion was given to them, and new acts were always obtained; and no person who joined the company expected that the act would be carried out literally-Ware v. the Grand Junction Waterworks Company (7), Lord v. the Copper Miners' Company (8). And the plaintiff was bound to shew that the line could not be made-The Queen v. the Eastern Counties Railway Company (9).

Mr. Turner, in reply. The parties in the case do not differ upon the principles to be applied to cases of this nature. One is, that the Court will interfere to restrain any deviation by companies from the powers intrusted to them by parliament, if it finds that they are really so deviating; and another is, that the Court will not wantonly interfere with parties who are in the exercise of their legal rights; but if it is discovered that there is a deviation from the powers given by parliament, then the Court instantly interferes to stop that deviation. In this case parliament gave power to the company for the purpose of making a complete line from Epsom to Portsmouth. On behalf of the plaintiff it was stated, distinctly and clearly, that they intended to make the railroad from Epsom to Leatherhead only. The defen

dants met the case by saying that they had not come to any determination that the entire line should not be made," and that to the extent and in the manner in which the same is proposed to be made, it will be beneficial to the interests of the shareholders, and is much desired by the inhabitants of Leatherhead, and the district adjoining." But the legislature did not give

(6) 2 Phil. 44; s. c. 15 Law J. Rep. (N.S.) Chanc.

266.

(7) 2 Russ. & M. 470; s. c. 9 Law J. Rep. Chanc. 169.

(8) 1 Hall & Twells, 85; s. c. 2 Phil. 740; 18 Law J. Rep. (N.S.) Chanc. 65.

(9) 10 Ad. & E. 531; s. c. 2 P. & D. 648; 8 Law J. Rep. (N.S.) Q.B. 340.

them powers to construct a line between Epsom and Leatherhead, or intend that the shareholders' money should be applied upon a probability or the possibility of a line being made to Portsmouth at some future time. It was on the faith of parliamentary engagements that parties entered into these contracts, and it was upon that principle, without reference to suggested inconveniences, that this Court had always acted. If contracts had been entered into boná fide, whether antecedent or subsequent to. the passing of the bill for the carrying out the entire scheme, the shareholders, to that extent, must pay up a portion of the capital of the company to provide for completing such contracts. It was said that bills for specific performance might be filed to compel the company to complete those contracts; they might be bound, but they were not deprived of the power of making calls to meet the necessary payments, unless the contracts were made to make a portion of the line, with a knowledge that the entire line could not be made in that case the parties making the contracts must bear the consequences, and this Court would restrain proceedings to enforce calls which were made to meet such improper contracts; but in all cases in which the company were compellable to perform their contracts they would hold the lands, which might be resold to replace the amount paid. It was said that the company might ask parliament for extended powers. If the argument availed anything, this Court could not restrain any act, however illegal, because the company might apply to parliament to sanction it. In Colman v. the Eastern Counties Railway Company an injunction was granted to restrain the company from doing things not warranted by their act of incorporation. That company, as many other companies had done, might apply to parliament, and obtain the sanction of its authority to do that, which was not within the compass of their original act. It was attempted to bring this case within the principle of comparative convenience and inconvenience, but that was only applicable, as in the case of Hilton v. Lord Granville (10), where it (10) 4 Beav. 130; s. c. 10 Law J. Rep. (N.s.) Chanc. 398.

was doubtful in whom the legal right was vested. In such cases the Court would satisfy itself on which side would lie the greatest mischief before it would interfere by injunction pending the determination of that legal right, but having satisfied itself, it would not hesitate to restrain the doubtful exercise of legal powers. It was stated that there had been a meeting, at which it was unanimously resolved to support the directors; but the principle upon which this Court interfered was, that if all the shareholders except the plaintiff were present at the meeting, and determined that this part of the entire line would be of advantage to the public and beneficial to the shareholders, the plaintiff would have a right to restrain them from making it— Natusch v. Irving (11) and Colman v. the Eastern Counties Railway Company.

The MASTER OF THE ROLLS.-I have seen no reason to alter the opinion which I expressed on the demurrer.

A corporation created by act of parliament, having obtained authority to construct a railway from one place to another, and having under their powers, and by virtue of that authority, obtained subscriptions and raised a capital, are bound to apply the capital so raised in or towards the construction of the whole line, and are not entitled to apply the capital so raised in the construction of a part of the line only, any otherwise than as the construction of such part is necessary for, and conducive to the construction of the whole line.

Any other opinion would be entirely contrary to the principle upon which such powers are given, and if it were established that companies had authority without a view to the whole, or for the purpose of performing the whole, to perform such part only as they pleased, or were able, of that which has been called their contract or bargain with the public, the consequence would be very dangerous to the public and to the shareholders, and probably productive of very extensive deception and fraud.

I am well aware of the difficulties in exercising the jurisdiction of this Court,

(11) Gow on Partnership, App. p. 407.